Climate normals and weather normalization for utility regulation

A-Tier
Journal: Energy Economics
Year: 2016
Volume: 54
Issue: C
Pages: 405-416

Authors (3)

Won, Seoung Joun (not in RePEc) Wang, X. Henry (University of Missouri) Warren, Henry E. (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In the regulation of natural gas and electric utilities, the determination of rate revenues commonly involves a sales adjustment to reflect the difference between actual weather and normal weather. This adjustment process, commonly known as weather normalization, is required to properly determine a set of rates which yields the revenue requirement under the assumption of normal weather. Normal weather values that characterize long-term weather patterns are critical component of weather normalization. Conventionally, normal weather values are calculated using the Standard Climate Normal (SCN). The SCN for any given calendar day is the 30-year average of the associated weather observations for that calendar day. In the regulatory process the SCN can inadvertently introduce biases in the weather normalization adjustment. This study investigates the sources and mitigation of these biases.

Technical Details

RePEc Handle
repec:eee:eneeco:v:54:y:2016:i:c:p:405-416
Journal Field
Energy
Author Count
3
Added to Database
2026-01-29